Nonprofits Should Ignore Old Stigmas and Practice Better Business

November 14, 2013

Nonprofits Should Ignore Old Stigmas and Practice Better Business

Some old stigmas regarding the operations of nonprofits need to go if organizations want to stay successful as the country continues to climb out of the recession. Some of the unspoken and unwritten rules of nonprofit etiquette are unnecessary and hold the entire sector back.  

In a blog for Huffington Post, Social Velocity President Nell Edgington names five taboos that nonprofits need to get over to be successful:

  • Raising a surplus
  • Pay market rate salaries
  • Get board members involved in fundraising
  • Never question donors
  • Invest in fundraising

The first two bullet points are financial management strategies that for-profits would never frown upon. While it may seem unethical to run a surplus of money, dialing down fundraising just because arbitrary goals have been met is not wise. As Edgington explains in the article, nonprofits with operating reserves can invest in creating a more resilient organization and improve staff recruitment, among other things.

Hiring and maintaining top talent in the nonprofit sector is a frequent topic of discussion surrounding the woes of nonprofit organizations. While nonprofits want employees that are mission driven, paying talented employees what they are worth should not be a mark of shame. Eventually, even devoted workers will leave for more money.

When it comes to boards, donors and fundraising, nonprofits should again consider if age-old adages are worth adhering to. It's OK for nonprofits to let donors know what they need and why they need it. While donors may want assurance that investments in the organization go straight to the mission, board members and fundraising leaders should not be afraid to explain that to be successful, the organization needs staffing, office space, etc. It's also acceptable to ask board members (and all employees at a nonprofit) to help in fundraising. Asking for donations is a necessary part of the nonprofit model and everyone that believes in the mission should help facilitate successful fundraising efforts.

Investing in top talent, inside and out
Nonprofits should focus not only on how they can improve their organization with talent from the inside, but also consider the benefits of outside services. Financial advisers, unemployment insurance savings programs and other consulting measure can help nonprofits improve the delivery of their mission. 

Successful nonprofits that are well funded can continue to expand the scope of their services and increase their impact. When nonprofits are successful, the people they help and the causes they fight for are also better for it.

Content presented by First Nonprofit Companies, the leading provider of state unemployment insurance solutions for 501(c)(3) nonprofit employers.

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